FTSE 100 preview: Index to extend losses as Italian woes continue

Alice Young
May 30, 2018 1 min read

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The FTSE 100 is set to open lower this morning, extending the previous session’s hefty losses, with worries over the political situation in Italy continuing to weigh on investor sentiment around the world. On the corporate front, Royal Bank of Scotland Group (LON:RBS) is scheduled to hold its annual general meeting (AGM) today.

Footsie to open lower

IG’s opening calls suggest that the UK benchmark index will start today’s session 0.23 percent lower at 7,615 points. In the US, shares tumbled last night, pressured by the political turmoil in Italy with the country potentially facing new elections. Asian shares meanwhile have tracked the US lower this morning.

“The way Italy’s short-term debt yields are spiking makes you think default risk is on radar in the market. It tells how grave the situation is,” said Makoto Noji, senior strategist at SMBC Nikko Securities, as quoted by Reuters.

At home, the Footsie posted a hefty fall yesterday, shedding 97.74 points to end the session 1.26 percent to 7,632.64, pressured by political worries in Europe.

Wednesday’s agenda

Investors have a lot to look forward to on the macroeconomic front today, starting with German unemployment data for May at 08:55 BST, to be followed by the eurozone’s business confidence index for May at 10:00 BST and Germany’s preliminary inflation data for the same month at 13:00 BST. In the US, the ADP employment report for May is scheduled to be released at 13:15 BST, to be followed by the second estimate of the nation’s second-quarter gross domestic product at 13:30 BST. The Bank of Canada’s rate decision will be announced at 15:00 BST.

In corporate updates, RBS is set to hold its AGM today amid reports that the government is poised to offload more shares in the bailed-out lender.

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